Over half, 53 per cent, of British businesses expect the government to remove the option for savers to opt-out of their auto-enrolled pensions and so make workplace pensions compulsory, Now Pensions has said.

According to a recent survey of 691 British businesses by Now Pensions, it is expected by over half that the government will make workplace pension saving compulsory at some point in the future.

While workers can currently opt out, rates have been low at around 9 per cent but have been anticipated by some that this may rise when contribution levels increase. Analysis by Now Pensions members also finds that women and older age groups are more likely to opt out.

Furthermore, over a quarter, 28 per cent, of businesses surveyed thought that following 2019, the government would look to raise auto-enrolment minimum contributions past eight per cent.

An additional 27 per cent also thought that the government may re-balance contributions that would see employers paying the same or a greater proportion than employees into workplace pensions.

A smaller 12 per cent believe the government won’t make any further changes to the auto-enrolment policy.

Now Pensions director of policy Adrian Boulding said: “On the face of it, very few people seem to be opting out of workplace pension saving so, right now, it seems unlikely that the government would decide to make it compulsory. But, the biggest test for auto-enrolment is yet to come with minimum contributions rising in April this year and again next year… as part of the phased introduction of auto-enrolment.

“If these rises result in a significant increase in the number of people turning their backs on workplace pension saving, the government may need to consider putting compulsory pension saving back on the table.”

Nonetheless, if opt-outs remain low, Boulding added, then this may encourage the government to consider ways of increasing contributions further.

Share Story: